Finance Videos

Dec 7, 2015 | 01:37

France on collision course with Renault?

Renault is drawing up proposals to relinquish some power over alliance partner Nissan, sources say, and will begin shoring up boardroom support in the final days before a likely clash with the French government. Ivor Bennett reports

TRANSCRIPT +

It was only ever supposed to be the little brother.
Renault first, Nissan later.
But since its rescue in 1999, the Japanese carmaker has overtaken its French parent.
This plant in Sunderland a testament to that - the chosen location for its new luxury Infiniti brand.
Chief Production Officer Trevor Mann explained the decision to build here in an interview last week.
(SOUNDBITE)(English) NISSAN, CHIEF PRODUCTION OFFICER, TREVOR MANN, SAYING:
"We have a very strong alliance between Renault and Nissan. And we make our production allocations jointly and globally. So we make sure that we're utilising our assets to the best we can."
Only maybe not for long.
A new law to double the power of long term investors in France will see the government control more than 30 percent of Renault from April.
Making it not just Renault's biggest shareholder, but effectively Nissan's too.
That's prompted fears of a backdoor nationalisation to move production and jobs to France.
With the company frantically trying to slam on the brakes.
It's reportedly drawn up plans to relinquish power over Nissan before the government can stop it.
Setting up the kind of collision the state should avoid, says Panmure Gordon's Simon French.
SOUNDBITE (English) SIMON FRENCH, CHIEF ECONOMIST, PANMURE GORDON, SAYING:
"The French growth rate at 1.2 percent is very very mediocre and actually government getting out of the way in a lot of key industries would be a key supporting factor for French economic growth going forward."
But with unemployment over 10 percent, the French government is searching for quick-fix solutions.
The far-right's victory in regional elections adding to its problems.

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